JIT liquidity is the practice of adding and removing liquidity around a trade in AMMs to capture fees with minimal exposure to price risk.
In AMMs that support concentrated liquidity, sophisticated actors can detect incoming order flow and briefly provide liquidity at the execution price, earning fees and withdrawing quickly after.
"A liquidity provider adds liquidity just before a large swap and removes it right after, capturing fees without long-term inventory risk."
"JIT strategies often appear alongside MEV techniques like priority gas auctions."
JIT liquidity can reduce fee revenue for passive LPs and affect price impact for traders. Protocols counter with anti-sniping mechanisms, minimum position durations, or fee tiers.
"Minimum active time windows or cooldowns discourage opportunistic JIT provisioning."
"Dynamic fees that rise during volatile periods can redistribute value toward longer-term LPs."
All terms and definitions may update as the Cryptionary improves.